On a rainy day in September 2014, Janus Skøt, Senior Director of Arla Foods Latin America and the
Caribbean (LATAM), looked out the window of his office in Mexico City. From his location on the
10th floor, Janus viewed the massive city and thought, “It is breath-taking to look out over Mexico
City, a metropolis with 25 million inhabitants” (Skøt, 2014a). The view reminded him of his firm’s
position, and he thought “we look at millions of potential consumers representing great potential for
Arla Foods. Our firm targets major cities, such as Mexico City, for their size and economic growth”
(Skøt, 2014a).
In 2014, Arla Foods had processed approximately 13 billion litres of milk. Another billion litres were
expected to enter Arla Foods’ production system in the upcoming year as an immediate consequence
of the European Union's abolishment of the milk quota in April 2015 (see Exhibit 1). With this in
mind, Janus thought to himself “Arla Foods has as much milk in its supply system as the entire
country of Mexico” (Skøt, 2014b).
Janus was attempting to determine how Arla Foods could build a competitive advantage in Latin
American countries given their milk deficits and growing middle class. Arla Foods had a diverse
portfolio of high-quality dairy products (see Exhibit 2), and over the course of several years, it had
developed a strategy for LATAM based on cooperation with local partners, such as dealers and
distributors, aimed at integrating its products into local retail chains (i.e., supermarkets). End
consumers of dairy products in Latin America and the Caribbean had different levels of purchasing
power that affected their purchasing decisions. Therefore, Janus carefully considered how Arla Foods
could develop a strategy to reach consumers across all income segments, not only in Mexico but also
in the 20 countries and 10 territories found in the LATAM region.

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31

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eng

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Copenhagen Business School

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dc.title

Building a "Milky Way" from Denmark to Latin Americe and The Caribbean